Florida to offer reverse mortgage help

Florida’s $1 billion program to help prevent foreclosures in the wake of the housing crisis continues to diversify.

The Florida Housing Finance Corp. announced Tuesday it would earmark $25 million of its Hardest-Hit Fund to help elderly homeowners with reverse mortgages.

The agency says the new program will help recession-battered Floridians hang onto their retirement home even if they’ve fallen behind on property tax, homeowner’s association or insurance payments.

“There are thousands of reverse mortgages in Florida that are in delinquency,” said Florida Housing Executive Director Steve Auger. “It’s now time to help homeowners who are in the twilight of their years, on a fixed income, experiencing a hardship and facing foreclosure. This new program should help them sustain their homes.”

Homeowners who meet specific qualifications can begin applying for the state’s new reverse mortgage help immediately.

Those eligible will receive a two-year, forgivable loan of up to $25,000.

The funds will be distributed to the mortgage servicer, on the homeowner’s behalf, in a lump sum to repay property-related expenses that have been advanced by the lender like property taxes, flood insurance and association fees. The funds may also be used to pay upcoming property-related expenses for up to 12 months.

Reverse mortgages allow aging homeowners to tap into their equity for cash flow – using their house as collateral. But most reverse mortgages require the borrower to pay their property-related expenses on time.

If the homeowner falls behind on those obligations, the loan servicer may issue a demand for payment-in-full of the reverse mortgage or even foreclose on the property, according to Florida Housing.

The state’s new reverse mortgage program comes just weeks after Florida Housing similarly expanded its Hardest-Hit foreclosure aid to also offer principal reductions for underwater borrowers.

The two new programs come amid complaints from Congress that the program’s $1 billion allotment to help homeowners bruised by the recession was not being spent fast enough and not reaching enough people.

Nearly 1,130 underwater homeowners in Southwest Florida applied for a share of the $350 million in Hardest-Hit grant money dedicated for those principal reductions. That includes 431 mortgage borrowers in Sarasota, 424 in Manatee and 274 in Charlotte counties, records show.

The agency also has provided more than $2.7 million in mortgage payment assistance to jobless homeowners facing foreclosure in Sarasota, Manatee and Charlotte counties.

These programs are part of a 18-state initiative to help homeowners avoid foreclosure, with $7.6 billion dedicated to the Hardest-Hit relief, including $1 billion in Florida.

Homeowners can apply for this new reverse mortgage help by calling 1-800-601-3534.

Josh Salman

Josh Salman is a business reporter for the Herald-Tribune Meda Group. He can be reached at email

Last modified: November 12, 2013
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